ICRA upgrades rating outlook for Jindal power from Negative to Stable

MUMBAI: Ratings agency ICRA has upraded the rating outlook for Jindal Steel and Power (JSPL) subisidiary Jindal Power from 'Negative' to 'Stable' as the parent company shows signs of turnaround in the last few quarters, JSPL said in a notification to the Bombay Stock Exchange (BSE). The upgrade has also considered revenue visibility coming from long term and medium term power purchase agreements (PPAs) in place for part of JPL's capacity. The ratings agency has also reaffirmed JSPL's long term credit rating of A- and short term credit rating of A2+.

With a credit portfolio of Rs 9,888 crore, the upgrade not only reflects the turnaround that the parent company has witnessed with the commissioning of a new blast furnace at its plant in Angul in Odisha, it is also based on the power company's "competitive capital cost as well as cost-efficient operations supported by the location of the plant in proximity to various coal blocks and linkage for part capacity," JSPL said.

The upgrade has also considered revenue visibility coming from long term and medium term power purchase agreements (PPAs) in place for part of JPL's capacity. It's installed capacity is 3,400 MW.

Chaired by Naveen Jindal, Jindal Steel and Power has st eel facilities based in Jharkhand, Chhattisgarh and Odisha.

ET had reported in January that after being directed by a RBI circular to categorise the account as non-performing, lenders were now considering to take it off the bad-loan list as it had been paying its dues on time.

The company had entered a period of slump when its coal blocks were cancelled and when demand for steel went down.

In fact, segment leaders like Maruti Suzuki, Tata Motors and Hero MotoCorp have reported de-growth of 34.3 per cent, 45 per cent and 20 per cent, respectively giving a clear indication of a prolonged slowdown in the sector.